Post by Admin on Jul 22, 2012 12:47:30 GMT -5

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The Kennesaw Patch is no longer Kennesaw it is the CobbCountyPatch

When the KennesawPatch started it was about Kennesaw, other Patch's were about Acworth, Marietta etc. AOL has well over 800 Patches around the Country.

So my question is where did the KennesawPatch go?

When you started I saw considerable work going into local stories, even the local businesses were given coverage and readers could comment on and rate local businesses and restaurants. Those are still up but no new additions have been made since the initial effort.

Now the KennesawPatch is full of stories about:Cobb School Board members, Six Flags, Should Cobb Adopt Outdoor smoking ban, Cobb Water Report, Smyrna Prostitution sting.

Why these stories?

You took the Kennesaw out of the KennesawPatch and made it the CobbCountyPatch.

You want some suggestions for Kennesaw?

Lets start with some downtown Kennesaw items that could use some publicity.

How about a story on T.J. Bryan's new restaurant, right across from the library. It was for several years The Boxcar Cafe. Closed for 9 months and reopened with the same staff as T J Bryan's Restaurant. I'm sure TJ would like some mention of his efforts to bring great food and pastry to downtown Kennesaw. See: [a href="theboxcarcafe.blogspot.com/"]theboxcarcafe.blogspot.com/[/a]

How about a story on the Pizza Brothers Restaurant? Remember 'My Country Kitchen'? It was for 35 years a downtown Kennesaw restaurant but fell on hard times and closed abruptly. That same restaurant is now being turned into a sit down Pizza restaurant and $240,000 has gone into an extensive remodel. I think this is a great addition to downtown Kennesaw and should get some recognition. The Owner Ron King (404 514-1001) could use some publicity See: [a href="mycountrykitchenkennesaw.blogspot.com/"]mycountrykitchenkennesaw.blogspot.com/[/a]

Remember the Cruchelow Jewelry and Loan problem? It was not covered very well in the Patch, some info but not as much as should have been done. Well that pawn shop has now moved to Marietta and will soon open there. A lot of people in NW Kennesaw would be interested in knowing what happened to that shop and where it went. They might also be interested in the civil action the property Owner Venturi has filed against the City of Kennesaw. See: [a href="kennesawpawnproblems.blogspot.com/"]kennesawpawnproblems.blogspot.com/[/a]

We need coverage of Kennesaw issues not Marietta issues. I don't want to read about Marietta, except perhaps as to where the Pawn Shop ended up. I don't care about Six Flags and I am not interested in the Cobb Water Report.

The Kennesawwatch is providing a lot of Kennesaw stories thekennesawwatch.com/ and is frankly a lot more interesting read than the Patch is now.

What did you do with the Harper Harris issue, not much, the Watch was all over it, how about the Ethics complaint against the Mayor, the Ethics meeting coming up Tuesday and Ambulance issue where Metro aced out Georgia EMS by the City Manager making a decision without consulting the City Council. See: www.facebook.com/TheKennesawWatch

If you are going to be the KennesawPatch then do Kennesaw stories, if you want to be CobbCountyPatch then change the name of your site.

Right now you are not very interesting and are not providing coverage of Kennesaw.

I guarantee that you are losing readership and probably a lot of people like myself are now going to the Kennesaw Watch where they cover interesting and important stories about what is going on in our community, it is also easy to 'comment' on their Facebook page and such comments appear in real time. Patch was like that once, not anymore, I still haven't figured out how to comment on Patch since it was changed three months ago. Patch is not user friendly.

Get back on track and cover Kennesaw, not Marietta or Cobb County. You want those stories you go to the Marietta Daily Journal.

Post by Guest on Jul 24, 2012 10:03:28 GMT -5

Here are some articles about Patch along with the links to them.

I have noticed that readers are sometimes to lazy to click on a link to get to a story, so here are the links plus the articles they lead you to and keep in mind that the articles have comments which are not reproduced here, for those use the link to go to the aritcles.

Here is a link to an article readers will find interesting, take a look at, "The Constant Gardener My two years tending AOL’s hyperlocal experiment"[/b] even the comments are interesting and just a few lines below from one of those comments is on point to what I both think about our local Patch!"The content on these sites has been steadily decreasing since the start of the new year -- on any given day, what I see on my local Patches is invariably some stupid poll (this week's is for "Best Cupcake" -- I'm not kidding) or a puff piece on the "winner" of the poll (it's a joke; you can vote as many times as you like). Also, there's a lot of house-for-sale real estate content.

The word count is 3,890 without headers, footers or the many comments, so reading time is going to be at 15 min at least.

The referenced article has a link to another interesting item: "LEAKED: AOL's Top 10 Patch Salespeople, And How Much They've Sold In 2011".

Here is one minor quote FYI:"Outside sales people, by the way, are the ones that actually go out and try to make sales in the field – as opposed to inside sales people who call out to agencies. In most online sales organizations, they are the ones bringing in the big bucks."

Patch.com, a network of small-town news sites owned by AOL Inc., has emerged at the center of a tug of war over the Internet company's future.

Patch.com, a network of small-town news sites owned by AOL, has emerged at the center of a tug of war over the Internet company's future, Keach Hagey reports on digits. Photo: Patch.com.

The high cost of running the local-news sites has fueled a campaign by dissident investor Starboard Value LP against AOL Chief Executive Tim Armstrong's strategy of investing heavily in online content.

Starboard, which is waging a proxy battle to win several seats on AOL's board at next month's annual meeting, says that Patch should be closed, sold or put into a joint venture, with a partner sharing the cost.

Inside AOL, Patch is also a flash point. Arianna Huffington, who took charge of Patch and AOL's other news and entertainment sites after AOL acquired her Huffington Post last year, distanced herself from the business after disagreements over how it should be run.

"They wouldn't let Arianna fix it, so she walked away from it," said one media executive familiar with the matter.

Mr. Armstrong, has held his ground in defending Patch, which he co-founded in 2007 before he joined AOL, but he recently promised to make it profitable by next year. In a small step toward that goal, Patch said Tuesday it will cut around 20 jobs, or less than 2% of its workforce. The cuts will come from merging the management of its eastern and southern regional reporting operations.

Whether Mr. Armstrong can make Patch a success could determine his fate at AOL. As the ad-supported network has expanded to more than 850 towns from 30 in the past two years, its annual loss has widened sharply to more than $100 million in 2011, analysts say.

The main problem: It is tough to sell enough online ads to cover the cost of producing local news, especially while maintaining a local reporting staff and a local advertising sales force.

"I don't think anybody's figured out local yet," said Rick Blair, an angel investor in several companies that run local websites.

Several big media companies, including Washington Post Co., Politico parent Allbritton Communications, New York Times Co. and Gannett Co., have given up on similar experiments after failing to wrest a profit from online local news.

Others are still trying. Examiner.com, backed by billionaire Philip Anschutz, draws roughly the same traffic as Patch, according to comScore, but its approach differs from Patch's.

The website has a full-time editorial staff of fewer than 30 people, who organize articles, photos and other media submitted by more than 85,000 freelance local "examiners." These examiners write about topics ranging from restaurants to running. Patch, by contrast, employs nearly 1,000 full-time journalists

Mr. Armstrong thinks Patch is on the right track, and just needs time to hit its stride. "To not believe in Patch, you have to believe that consumers in a town don't want local information, they don't want local advertising or commerce, and they don't want a platform they can engage on," he said in an interview.

Frustrated by the lack of local online news about his hometown of Greenwich, Conn., Mr. Armstrong developed the business model for Patch with Jon Brod, the former president and chief operating officer of his private investment group.

The idea was to target wealthy small communities that generated about $20 million a year in advertising though TV, radio, newspaper and direct marketing.

"We basically said, 'based on our model, if we could get [less than 1%] of that $20 million, we would have a profitable Patch in that community," Mr. Brod said. "And then, multiply that by thousands of communities across the country, and it becomes a very material and interesting business."

Patch, however, has fallen well short of that target. AOL says the business is on track to bring in between $40 million and $50 million in revenue this year. That translates to an average of $50,000 for each of its 850 local sites. But the average Patch site costs between $150,000 and $200,000 a year to operate, Mr. Armstrong told investors last year, or a total of $160 million.

Ms. Huffington's recent withdrawal from overseeing Patch highlights internal divisions over the operation. Following Huffington Post's acquisition last spring, Ms. Huffington set about integrating Patch with the Huffington Post.

She recruited Liena Zagare, the founder of a successful network of hyperlocal blogs in the New York borough of Brooklyn, to improve Patch's ties to its local communities, and Patch quickly adopted a blogging platform modeled on the Huffington Post's.

The blogging platform attracted more than 20,000 local bloggers within a year, pleasing Patch's local and regional editors. The sites also got a traffic boost when their local scoops were linked by the Huffington Post.

But they sometimes chafed at top-down directives, called "fire drills," that required Patch journalists to pitch in with reporting for national trend stories in the Huffington Post, draining resources from their local mission, according to several people familiar with the matter.

Ms. Huffington also ruffled feathers by promising local editors they could each hire associate editors to help with their workload, even though salaries for such posts weren't part of the website's business model, according to people familiar with the matter.

People familar with her plan said the associate editors would have been paid for with savings in freelance costs.

"There was a big disconnect between what we [at Patch] felt and what Arianna was throwing into the mix," according to a person familiar with the situation at Patch at the time. "It led to a lot of gears starting to grind."

Within six months of AOL's merger with the Huffington Post, Ms. Huffington's involvement in Patch had waned, according to several people familiar with the situation, and by the end of last year, Ms. Zagare had moved on to a job at the Huffington Post. In May, Ms. Huffington announced that she was scaling back her portfolio to focus on her namesake news site.

The good news for Patch is that its traffic has grown sharply, swelling to 10.3 million visitors in April from 6.9 million a year earlier, according to comScore. Patch attributes the improvement largely to growth at its established sites.

In addition, more than a third of Patch's content now is generated by users uploading announcements, photos and other content, helping Patch shrink its budget for freelancers.

As well as relying even more on content from the public, Patch is planning to move beyond advertising and into local commerce, Mr. Brod said, and to look for new sources of revenue in partnerships.

Last week it began a partnership with WPIX, a New York TV station owned by Tribune Co., in which a Patch correspondent delivers the area's top local news stories from Patch headquarters during the evening news.

In an internal memo, Mr. Brod called the partnership "yet another way for us to distribute and monetize our content."

"I think Patch has got an approach that will be a long-term win," said Mr. Blair, the angel investor. "It is just going to take them some time."

A Patch insider tells Romenesko readers that the AOL-owned hyperlocal news sites plan to cut staff and freelance budgets and start producing “easy, quick-hitting, cookie-cutter copy.” Examples: Best Ofs, and features like “What’s happening to this vacant storefront?”

The Patch source adds: “This morning we just got word of the hiring of Rachel Fishman Feddersen in the newly created position of Chief Content Officer. She was editor in chief of Parenting.com and held leadership posts at Ladies Home Journal, Disney’s Family.com and was, most recently, editorial director of The Parenting Group. Brian Farnham, our Editor In Chief, now reports to her.”

That hire, says the source, “feeds so logically” with the changes described below.

Patch has implemented a new “One Team One Goal” strategy, with a budget that effectively eliminates anywhere from 50 to 100 percent of freelance dollars, depending on the Patch region and how the supervising editor and regional ad director choose to allocate dollars.

The editorial emphasis is now on “easy, quick-hitting, cookie-cutter copy,” including mandatory “Best Of” features (i.e., best coffeeshop, best burgers, etc.) that compel businesses and readers to visit and participate in the Patch directories. (Each Patch has a directory of local businesses, organizations, churches, etc.)

“We’re going so far, in many of our Patches, to host ‘Pizza Playoffs’ — a tournament-style bracket that pits all the pizza parlors in town into showdowns to attract the most comments and star-ratings. Features like this could go on for weeks at a time, and when one ends, another will begin.”

Every Patch is adopting other, similar features. One example: “What’s happening with this vacant storefront?” — a photo-driven feature that asks readers for comments about what they’d like to see in the space.

Also, I’m told that this is in the works: Every Patch employee given a rating of “Developing” on the recent 2011 Employee Annual Review will likely be placed on a Performance Improvement Plan (PIP) that begins a 30-day countdown to either improve or lose your job. (“Developing” is the second-lowest on a five-tiered scale; there’s Top Performer; Exceeding Expections; On Track; Developing; and Off Track.) Managers have been asked to write a three-page letter supporting why this employee should stay; otherwise, the employee will be placed on a PIP. The Patch insider estimates this will affect anywhere from 100-150 employees Patch-wide, and people will be let go by the end of March.

“My guess is this is a way for Patch leadership to enact layoffs without saying it’s laying anyone off — it’s merely ridding itself of employees who ‘aren’t working out’ — while also showing AOL’s board it can shave a lot of overhead while building toward profitability.”

I asked the Patch insider about AOL’s commitment to the sites. “I think AOL is committed to Patch at least through this calendar year,” the source says. “Arianna Huffington will make sure we’re all charging up to having a big impact on coverage of the elections in November. But if we haven’t shown real moves toward profitability by then, I can’t imagine AOL will put another penny into Patch in 2013.”

I’ve invited Patch to comment and will post the response when/if it comes in.

========================================ALSO FYI:

Why Patch will never be profitablePosted on March 24, 2012 by Howard Owens

Patch faces to huge obstacles on its path to profitability: The first is expenses; the second is revenue.

Expenses:Tim Armstrong is absolutely right that a great deal of the expense of a print publication can be wrung out of local news coverage. Not only do you get rid of industrial age presses and trucks along with paper and ink, it also takes a lot less staff — because of the efficiencies of online publishing — to cover a community.

Reportedly, AOL is spending $160 million a year on Patch. That’s a lot of money, and I don’t just mean because that’s more money than a lot of us will ever see in a lifetime. I mean, it’s a lot of money because the Patch content model shouldn’t be that expensive. That means Patch is spending about $190,000 per each of its reportedly 864 sites.

In the one-reporter-per-community model, expenses should be $140,000 or less per site. (I’m also including in that some expense for sales and support.)

Of course, Patch isn’t spending $190,000 per site. It’s spending less than that, and the remainder of its $160 million annual expenditure is going to overhead. Some of that is legitimate, such as infrastructure, programmers and technical support. By legitimate, I mean, there is some level of expense on technology for every local news site.

But some of that money is part of the unsustainable expense of running a large chain news organization. For Patch, it’s regional editors, regional sales managers, supervisors for the regions, executives over them, HR departments and legal and regulatory departments (necessary for a publicly traded company).

These are all expenses that the local independent site doesn’t face and raises the bar much higher for Patch overall to become profitable.

It’s a major factor of expense that advocates of “scale” in local news often overlook. News isn’t a widget. It isn’t a washing machine or box of software. It isn’t an industrial product. In industry, scale is vital because the largest part of the expense of making the product is just turning the machine on. In news, each new piece of product (a news story, say) costs essentially the same amount of money as the previous piece of product. There is no expense savings in producing more product, there is only more expense.

The same analogy applies to each individual news org you create (each of the 864 Patch sites). In trying to scale a national news organization, you’re not saving money by scale. You’re scaling up your expenses, both in local staff and then in the national and regional staff (as pointed out above) to run the company.

Expense is the Catch-22 of trying to scale local news.

This expense was masked in the newspaper industry because every newspaper that is now part of a national chain was a HUGELY profitable, family owned newspaper at the time it was absorbed into a chain. That profit helped feed the beast of corporate overhead, thereby masking the real expense of creating the chain.

In fact, the problem for newspapers today isn’t so much that individual newspapers lose money; it’s the fact they’re still saddled with the expense of being chain owned.

Revenue: According to Ken Doctor, Patch executives claim 1/4 of its 864 sites is making at least $2,000 per month, and Doctor is somewhat rhapsodic over the figure. He sees this bit of revenue growth as a “rocket launch.” In reality, $2,000 is nothing.

With The Batavian, we went from practically no revenue in March 2009 to more than $4,000 a month four months later. And that’s with one person covering the news and selling the ads, and in a market that is far more economically challenging than any Patch has launched in.

The successful independent sites I know are all doing at a minimum $10,000 per month.

Clearly, Patch is struggling to sell local ads, which should be the bread-and-butter of its strategy.

If somehow, every one of the 864 sites managed even just $10K per month, that’s still only $106 million a year in revenue, far short of the $160 million in expenses weighing down the chain.

To achieve break even, each Patch site needs to do more than $16,000 per month in total sales. That is a very achievable number with the right business and sales model (which I don’t believe Patch has, but that’s another topic).

So the problem Patch faces is burdensome and unnecessary corporate overhead expenses and a failure, so far, to generate any meaningful amount of revenue. Patch should be much further along on the revenue side than it is and that spells trouble for investor patience.

CLARIFICATION: Shortly after posting, I should add. I think each of Patch’s 864 markets is capable of generating at a minimum of $500,000 in annual revenue. I just think time will run out on Patch before the chain breaks even. Also, as Patch generates more sales, expenses will increase. That will further delay the break-even point. If Patch were to survive, fix its business and sales model, achieve maximum velocity, we’re probably looking at a company with $250 million in annual expense and $500 million in annual sales (at the current size of the company). I assume investors would be happy with that performance. I just don’t see how they sustain the losses to get there.

AOL (NYSE:AOL) this weekend unveiled a redesign of its Patch hyperlocal news network, which has struggled to make a profit. The new Patch, though, is still a work in progress and just doesn’t seem ready for prime time.

One of the beta sites covering a town on Long Island, N.Y., does have some interesting ideas. It’s based around “groups” focused on particular subjects such as schools or local business. Readers can form their own groups as well. Editors’ picks are shown at the center of the page. The problem is that much of the content was not particularly unique or even interesting.

For instance, much of the main police story was cobbled together from accounts from other sites. Allowing regular folks to submit news items leads to stories such as this one about a young man who was admitted to Alfred State, a New York college, that reads like it was cut-and-paste from a press release. It even ends with “The College is accredited by the Middle States Association of Colleges and Schools,” as if there were some doubt about it.

Maybe the point of this item is to encourage other parents to share the news about their child’s admission to college. That’s not necessarily a bad way to build interest in the site, but it’s not going to be enough to keep the public engaged. Readers want to read about stuff besides the accomplishments of other people’s children.

The overall design looks as though it’s a template that someone downloaded for free. It’s cheesy. The graphics look amateurish.

Photographs are cropped so small that it’s hard to see much in the way of detail. According to Poynter.org, Patch will beta-test the design before it rolls out to 50 or mores sites by year-end. All Patches will be redone by the first quarter of next year.

Patch’s struggles are well documented, as is the backstage drama surrounding it and AOL’s future. It was a focal point of the recent losing proxy battle that activist investor Starboard Value waged against the New York-based media company. CEO Tim Armstrong vehemently disputed Starboard’s claims that Patch was not a “viable business” and was on track to lose as much as $133 million. Though Patch is expected to take in $40 million in advertising revenue, its costs are about four times that amount, according to media reports.

Armstrong has already retooled Patch once, revamping its management structure and axing 20 employees. Editors, who previously have complained about being overworked, are faced with having to do more with less. Traffic to the network of more than 800 sites, which had been steadily growing as more towns were added, peaked last August, according to a May commentary in Forbes by Jeff Bercovici.

For Patch to be a success, it’s going to need to attract newspaper-size audiences and keep them engaged. The best way to do that is to provide readers something that they can’t get any place else, which Patch can do at times. I recently looked at a Patch site from a neighboring town where I live and found out that a prominent local businessperson was moving her firm into the site of a grocery store that had been closed for years. I haven’t seen it reported elsewhere.

That sort of community news used to be the bread-and-butter of local newspapers and still is to some extent, though as the industry withered so has that kind of coverage. Patch could take up the local news mantle that newspapers abandoned, but it seems to lack the vision to do so. That’s a shame.

Jonathan Berr is a former AOL contract writer. He does not own shares of the companies listed here. Follow him on Twitter @jdberr.

The Wall Street Journal AOL is spending heavily on content, the Journal reports, with its second-quarter results showing that its “cost of revenue increased 20% from a year earlier to $403.4 million.” Included in that cost is hiring for the network of Patch sites:

AOL is spending about $160 million a year on Patch, which equates to about $150,000 to run each individual Patch site annually, according to an analyst’s estimate. AOL first focused on building traffic to Patch sites, and just recently started ramping up ad sales. …

Boosting traffic is crucial to capturing ad spending.Traffic to AOL sites rose just 3% in June, according to comScore Inc., with increases to its newer properties, such as the Huffington Post and local Patch websites, barely making up for steep declines at its legacy sites, such as the AOL.com home page and mapping site MapQuest.

One analyst questions the business model: “If you sell lemonade for $1 and it costs $800 to make it, that’s not a great business.”

The network of local news sites for suburban towns laid off around 20 employees in a reorganization meant to eliminate an inefficient layer of management. (The Wall Street Journal was among the first to report the cutbacks.) By reducing the number of geographic zones (from four to three) and teams (from 31 to 20) in its structure, the company was able to shed a number of more highly paid managers without exiting any of its 800-plus markets, says a Patch source.

Employees were told the reorganization is a step toward the goal of getting Patch to break-even on a run-rate basis by the end of 2013. AOL chairman Tim Armstrong promised investors that will be the case during the company’s first quarter earnings call.

Armstrong said Patch is on track to book around $40 million in advertising revenue in 2012 after taking in virtually no money last year. While that’s a big change, Patch’s costs last year totaled around $160 million.

Getting the two lines to cross by the end of next year, then, will likely require further cost-cutting as well as revenue-boosting. That will be even more true if Patch’s traffic doesn’t start growing again. After growing steadily through the first half of 2011, a period during which it was steadily expanding into new markets, the network’s overall audience peaked at 10.6 million unique visitors per month last August, according to comScore. Since then, it’s been flat.

The halt in traffic growth coincided roughly with AOL’s decision to tap the brakes on its expansion into new markets. Another possible explanation is that Patch has been decoupled from the faster-growing Huffington Post.

While it’s only recently that AOL has officially confirmed that Arianna Huffington is no longer overseeing Patch, the Patch source says it’s been months since she has been present on staff-wide conference calls.

On Jan 16th I dropped a line to you folks as seen below. It complained about the poor job that Mr. Thrash was doing with the Kennesaw edition of Patch.

Today I attempted to post a comment on a thread and got the below kick back from your system.

Sorry, your account has been suspended. Please contact support@patch.com for more information.

Seems to me that Rodney can't take any criticism about how he is doing with the Kennesaw Patch. When I get a little more time I will do some research and find out who the top people are at Patch and I will be writing to them about Mr. Thrash and how you folks at Patch deal with people who have the nerve to let you know that the job is not being done in their community.

In the meantime I will be adding this to my blog site so that Joe and Jill Sixpack are informed about Mr. Thrash and Patch.

Re: Complaint about Rodney ThrashI would like to bring to the attention of various Patch writers and hopefully administrators that I and several other viewers of the Kennesaw Patch are not at all satisfied with the current editor of this site, Mr. Rodney Thrash.

When I came across it there were 2 posts. The first was a complaint from a reader that his prior post had either been removed or not published. The reply from Mr Thrash was that it was removed for the posters own good in that Mr. Thrash wanted to see to it that the poster was not sued for libel.

Having had my own posts not posted I added my own comment on the matter, and I got this reply:

Hi Bill,

Thanks for getting active on Kennesaw Patch. We encourage each of our neighbors to join the conversation, share their thoughts, and speak up. However, the following comment cannot be published on the site because it conflicts with our Terms of Use.

Your recent contribution:"Rodney is into not approving comments. Other site managers didn't but Rodney likes to play censor so he bans your comments and at least one of mine, probably several but whose counting?"

You’re more than welcome to add a new comment and submit it anytime to Kennesaw Patch. Just refer to the Patch Terms of Use below.

I submitted this above referenced comment and the logo 'pending approval' appeared. In checking back several hours later not only was my pending post not used the original post from the viewer and the Thrash reply were also gone.

I would also mention that another poster had written in comment on the Park issue and supplied photos of the litter he found in the park. Those photos were not used and Thrash said that they could not be used as he could not verify that the trash was in the park.

Thrash copied me on a reply to another poster, even though I had not been involved in the complaint that poster had emailed Thrash about, here is the series of emails with the original posters name/email redacted:

> Rodney,> Again, I want to express my opinion about the content on Kennesaw Patch. Almost nothing of any significance! There is so much going on in our town, but seems to me very little is being posted. I serve on the museum board with David Chastian and have expressed my opinion to him also. I don't believe you folks are providing the people of Kennesaw much of a service. There is lots posted about Kennesaw College, but many people are like me and don't give a HOOT about the Owls.

> name of sender deleted> > Sent from the iPhone of a very dissatisfied United States Citizen. GOD HELP OUR COUNTRY!!!!

========================================

If you Patch authors would like to furnish me with the email addresses of those further up the food chain I would be pleased to send this complaint on to them, of course you can just forward it yourself.

Post by Admin on Jul 1, 2013 14:38:13 GMT -5

After more than five years of reporting on school-board meetings and community bake sales, AOL Inc.’s Patch is now at the center of another story: whether the company’s bet on local news can be profitable.

Patch, with more than 900 sites supplying news to communities or neighborhoods, has become a test case for both the online-news industry and AOL’s ability to transform itself from a dated dial-up service to an ad-driven Web publisher.

=============================================

Chief Executive Officer Tim Armstrong has spent more than $600 million on media content in recent years, half of that on the money-losing Patch venture. The rest was for the Huffington Post, acquired in 2011 for $315 million, and other sites such as the technology blog TechCrunch.

Following investor complaints that Patch has been holding back AOL’s turnaround, Patch now faces a do-or-die year in 2013, said Benjamin Schachter, a media analyst with Macquarie Securities USA Inc. in New York. If the company can’t make Patch profitable, it may close down the division, he said.

“Investors have been frustrated for a long time,” said Schachter, who has a neutral rating on AOL. “If they don’t get to profitability, they’ll probably cut it. It’s going to be a challenge.”

‘Finish Line’ Armstrong vowed that Patch will break even by the fourth quarter of this year -- a feat that would probably require both a big sales gain and a sharp reduction in expenses. Still, he made clear that won’t be easy.

“What you’re going to see as we get to Q4 is us trying to get to the finish line of profitability,” he said last month on a conference call with analysts. “And we will use all means possible to get there.”

Shares of New York-based AOL rose less than 1 percent to $36.76 at the close in New York. The shares have climbed 24 percent this year, beating the 16 percent gain of the Standard & Poor’s 500 Index.

Each Patch site zeroes in on a community -- whether it’s Waukesha, Wisconsin, or Brooklyn’s Park Slope -- and tries to become an indispensable source of local news. The content, everything from concert listings to crime blotters, is generated by both on-staff editors and unpaid contributors.

The company has about 160 sales representatives covering the 900-plus Patch locations, said Steve Kalin, CEO of the Patch division. He has plans to hire more.

Staff Cuts At the same time, Patch is cutting costs elsewhere.

It eliminated 40 staff positions last month, a person familiar with the move said at the time. Patch also collapsed the editorial structure, reducing the count of 20 regional editors down to nine. The push for profitability has forced Patch to put single editors in charge of multiple sites, increasing burnout.

Still, the business will need sales to at least double this year to be profitable -- even assuming AOL slashes Patch’s budget in half. Patch pulled in just under $35 million last year, missing its sales target by about 13 percent, due in part to Hurricane Sandy, according to Armstrong. While Sandy increased demand for news, some local businesses reduced advertising orders in the wake of the disaster -- a storm that cut a path across 329 Patch towns in the Northeast.

Even so, Patch more than doubled its revenue last year from the $16 million in made in 2011. At that growth rate, the unit would have sales of about $70 million this year, or $78,000 per Patch. The average cost to operate each site is $140,000 to $180,000, Armstrong told investors in June, leaving a wide chasm between revenue and expenses.

Greenwich’s Lessons

Armstrong put up $4.5 million to start Patch, which started in 2007 with three townships in northern New Jersey. The startup eventually added more sites, and two years later, Armstrong sold Patch for $7 million to AOL, which was then still part of Time Warner Inc. As AOL’s CEO, Armstrong recused himself from the deal and forfeited the $750,000 he made in profit. He also returned the $4.5 million he recouped from the sale in exchange for AOL shares after it split from Time Warner. “Patch is always something I’ve believed in,” he said about the transaction. “And I knew it could grow within AOL.”

Patch’s future may hinge on applying the lessons of Greenwich, Connecticut -- Armstrong’s hometown and the location of one of the company’s more successful sites.

The Greenwich Patch, started in 2010, benefits from an affluent population, a steady stream of stories and an engaged local government. The Greenwich First Selectman, Peter Tesei, sometimes uses Patch to make government announcements.

“It can sometimes be faster than sending out a press release,” he said.

Sandy Alert Armstrong is a user of Patch’s hyperlocal updates himself. He recalls working from home in Greenwich last October when he smelled smoke. It was the week Sandy was lashing the East Coast and Armstrong became concerned there was a fire. After calling neighbors and looking out his window -- without learning anything -- he got an e-mail from Patch: Three nearby homes were in flames. “The alert came before I even thought to check for any news online,” Armstrong, 42, said in an interview. “Shows you how crucial Patch can be.”

Ultimately, Patch’s success hinges on advertising -- an area where it’s trying to broaden its focus. In addition to courting ads from local businesses, Patch has landed national advertisers such as Sony Corp. and the Rock and Roll Hall of Fame. It’s also going after regional advertisers, including the WNBA’s Connecticut Sun team and the Cook County Department of Public Health. Ad Dollars Major advertisers are slowly starting to spend more on locally targeted campaigns, said David Cohen, an executive with media buying agency UM, a division of Interpublic Group of Cos. “It’s only matter of time before we see dollars flowing into this area,” Cohen said.

In the meantime, Patch is adapting to the shift to social media and mobile devices. The company is developing a mobile app that allows readers to post photos and videos, making Patch into more of a Facebook for communities -- as opposed to just a local newspaper. That increased social activity can also add traffic, relieving pressure on staffers to generate page views.

The embrace of social media can lead to some questionable content. A February post from a Patch blogger in Avon Lake, Ohio, said that deer crossing signs in her neighborhood were a waste of taxpayer dollars because “deer cannot read.” The item became fodder for blogs such as Gawker to mock Patch.

“There may be posts that are odd or unusual or funny,” Kalin said. “We accept that.”

Post by Guest on Aug 2, 2013 18:56:23 GMT -5

I bounce between 4 of the Patches, 3 in one area one outlier up North. The ones close together seem to have the same articles, although the comments are mostly different.

I saw info that they went to one 'editor' for 3-4 Patch sites so I guess that editor just posts the same stuff on all the blogs that they are responsible for PLUS they seem to post a lot from our local newspaper which isn't really 'news', it is just filler from the local rag.

All in all it is disappointing and I would not be surprised to go look one day it it will be closed down.

Post by Admin on Jun 2, 2014 7:41:21 GMT -5

We all know that AOL Patch sucked but there was just a bit of good news when in January Charles Hale (Hale Global) took over the all but defunct Patch from AOL.

HG dumped all but 125 or so 'editors' and in theory HG was to reinvent the brand by doing unspecified things to revamp Patch.

So far I haven't noticed any improvement and in fact the people kept on, at least in my area, seem to be the dregs of the old AOL bunch.

Not only are local Patches BORING but 'editors' are more censors than editors as local commentary on threads is deleted, seemingly on whim of the local editors, who then post that no comments were in fact deleted.

When I challenged this self serving and bogus claim by posting a long correction under this editors claim, it was gone the next morning, so much for any validity to the claim of no post deletions.

Post by Admin on Jul 28, 2014 18:16:48 GMT -5

At this writing there are about 150 comments on the new format, most don't like the 'new' Patch, myself included. It drifted away from local long ago and I don't see it going back to local under the new format.

I think Hale Global has a lot of work to do and probably they bit off more than they can chew.